In the post-crisis market, the Federal Housing Administration (FHA) has become a major player — and the only player for borrowers with limited cash and not-so-great credit. FHA’s share of the single-family mortgage market is about 30 percent today, compared with 3 percent in 2007. Unfortunately, FHA has suffered heavy losses on loans it insured during the go-go years prior to 2007, which have eaten into its reserves, and these are now below the level mandated by law.

As a result, it must either increase income, curb losses or both.

In April, FHA increased the upfront mortgage insurance premium from 1.75 percent of the loan amount to 2.25 percent. Against intense political opposition, it also banned the widespread practice of having home sellers contribute to buyers’ downpayments through the intermediation of nonprofit corporations, who took a piece of the contribution for themselves. These loans had extremely high loss rates.